ISSAI 1710The International Standards of Supreme Audit Institutions, ISSAI, are issued by the pdf

I N T O S A I Financial Audit Guideline – Comparative Information – Corresponding Figures and Comparative Financial Statements This Financial Audit Guideline draws on a not final redr

ISSAI 1710 The International Standards of Supreme Audit Institutions, ISSAI, are issued by the International

Organization of Supreme Audit Institutions, INTOSAI For more information visit www.issai.org

I N T O S A I Financial Audit Guideline –

Comparative Information – Corresponding Figures and Comparative Financial

Statements

This Financial Audit Guideline draws on a not final redrafted version of International Standard on Auditing (ISA) 710, ”Comparative Information – Corresponding Figures and Comparative Financial Statements” developed by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC) The proposed ISA is included in this Guideline with the permission of IFAC.

Exposure Draft of INTOSAI Practice Note, pages 3-4

(ISA 710 enclosed for reference)

For Comments

2 February-1 May 2009

This is trial version www.adultpdf.com

2 This is trial version

www.adultpdf.com

1(4)

Date: January 29, 2009 Ref no: 14-2008-0111

Request for comments:

Draft Practice Notes for International Standards on Auditing (ISA) 600, 610,

700, 705, 706,710 and 720

The enclosed Practice Notes have been developed by the Special Expert Teams no 4 and 5 and approved for exposure by the Financial Audit Guidelines Subcommittee at their meeting in January, 2009

With this letter the Practice Notes are exposed for comments from

the entire INTOSAI community The exposure period expires on

May 01, 2009

Format of Comments Commenting on exposure drafts is open to all members of INTOSAI and other interested stakeholders All comments will be considered

by the experts and back-office experts involved in development of the guidance before issuing the final guidance for approval by Financial Audit Guidelines Subcommittee and thereafter the Governing Board

Request for general comments Comments may be issued as desired, however it is preferable if the comments are structured to give an answer on the following basic questions:

Do you agree with the stated applicability for the ISAs in the public sector environment?

Do you agree with the stated additional guidance given in the Practice Notes? If not what additional areas/guidance do you think should be added?

In your opinion, will the drafted guidance together with the respective ISA provide relevant guidance for the public sector auditor?

This is trial version www.adultpdf.com

2(4)

All comments provided will be exposed on the FAS website as well

as on www.issai.org after the commenting period is closed

FAS especially encourage and highly appreciate comments

from Courts of Accounts

Request for specific comments

Practice Note for ISA 600

Paragraphs P3 and P4 is drafted to clarify that if the group

auditor refers to a component auditor in the group auditor’s

report and therefore not take the sole responsibility, the audit is

not in compliance with the ISAs This is no difference related to

the public sector, and is already contained in the ISA Do you

consider it relevant to have the responsibility clarified as drafted?

The practice Note has some appendices (Appendix 2-4) providing

additional public sector related examples or matters related to

the appendices of the ISA Do you have additional suggestions to

be included in the appendices?

PN 600 does not provide additional guidance directed to the

Court of Accounts environment Representatives from Court of

Accounts system are highly welcome to suggest any such

guidance relevant for the PN 600

Practice Note for ISA 610

The FAS has considered that the issue of determining the

independence for internal auditors needs to be explained as

included in paragraph P4 Do you agree on the issues to consider

in order to determining the independence and objectivity in the

public sector in addition to those FAS out in ISA 610?

The FAS did not identify a need for any specific Court of

Accounts guidance Representatives from Court of Accounts

system are especially requested to suggest guidance if needed

Practice Note for ISA 700

The experts considered ISA 700 applicable for audits of financial

statements in the public sector The experts considered the

illustrative example reports in the ISA to be relevant to the

public sector as well and decided not to include any additional

examples Do you agree?

The Practice Note to ISA 700 provides guidance on how to make

reference to auditing standards that are applied in the public

sector (paragraph P12) Do you consider the reference relevant?

This is trial version

www.adultpdf.com

3(4)

The Practice Note addresses the issue on references to

compliance with ethical requirements in the auditor’s report in

P9 Do you agree with the guidance provided?

INTOSAI Fundamental Principles (paragraph 4.0.20.) deals with

inclusion of recommendations and responses from the audited

entity within the auditor’s report FAS considered such inclusion

not to be acceptable in the Auditor’s report Therefore the

guidance in P5 has been drafted Do you agree with the guidance

provided?

The Practice Note for ISA 700 does not provide additional

guidance directed to the Court of Accounts environment Experts

representing the Court of Accounts system are highly welcome to

suggest any such guidance relevant for the Practice Note for ISA

700

Practice Note for ISA 705

The FAS has considered ISA 705 applicable for audits of financial

statements in the public sector as explained in paragraph P2

The FAS did not consider it necessary to include any additional

examples of modified opinions in addition to the illustrative

examples included in the ISA The differences in the public sector

would mainly relate to the addressee and the subject for

modification Do you agree, or would you prefer that examples

were included in the Practice Note?

The FAS did not identify a need for any specific Court of

Accounts guidance Experts representing the Court of Accounts

system are especially requested to suggest guidance if needed

Practice Note for ISA 706

The FAS considered ISA 706 applicable for audits of financial

statements in the public sector, and have concentrated on

providing additional guidance relevant to the public sector P3

provides examples relevant to the public sector on circumstances

when an Emphasis of Matter(s) paragraph may be issued, in

addition to the examples of circumstances in paragraph A1 of the

ISA If you have examples of other relevant circumstances that

can render an Emphasis of Matter(s) paragraph, please provide

such examples

The FAS did not identify a need for any specific Court of

Accounts guidance Experts representing the Court of Accounts

system are especially requested to suggest guidance if needed

Practice Note for ISA 710

The FAS considered ISA 710 applicable for audits of financial

statements in the public sector both related to comparative

financial statements and corresponding figures However, the

experts were a bit concerned with not being aware of the extent

This is trial version

www.adultpdf.com

4(4)

of the existence of comparative financial statements in the public

sector It would therefore be helpful if you could include in your

response information regarding whether you are auditing

comparative financial statements and if so, if the guidance

provide is relevant

The FAS did not identify a need for any specific Court of

Accounts guidance Experts representing the Court of Accounts

system are especially requested to provide and suggest specific

guidance if needed

Practice Note for ISA 720

Paragraph A1 of the ISA addresses other reporting

responsibilities The FAS considered that there was no additional

need for guidance in this respect Do you agree?

The FAS did not identify a need for any specific Court of

Accounts guidance Experts representing the Court of Accounts

system are especially requested to provide and suggest specific

guidance if needed

Thank you very much for taking the time to consider these Practice

Notes

Jonas Hällström

FAS Director

Please send your comments by January, 31 2009 to:

projectsecretariat@riksrevisionen.se

or by mail to:

Riksrevisionen

The FAS Project Secretariat

114 90 Stockholm

Sweden

or by fax to: +46-8-5171 4111

This is trial version

www.adultpdf.com

T able of Contents

This is trial version

www.adultpdf.com

3

ISSAI 1710

Practice Note1 to [Redrafted] International

Standard on Auditing 710 – Comparative

Information – Corresponding Figures and

Comparative Financial Statements

Background

This Practice Note provides supplementary guidance on [Redrafted] International

Standard on Auditing (ISA) 710 – Comparative Information – Corresponding

Figures and Comparative Financial Statements It is read together with the ISA

The Practice Note is effective the same date as the ISA

Scope of the ISA

ISA 710 deals with the auditor’s responsibilities regarding comparative information

in an audit of financial statements When the financial statements of the prior period

have been audited by a predecessor auditor or were not audited, the requirements

and guidance in ISA 510 (Redrafted)2 regarding opening balances also apply

The Nature of Comparative Information

The nature of the comparative information that is presented in an entity’s financial

statements depends on the requirements of the applicable financial reporting

framework There are two different broad approaches to the auditor’s reporting

responsibilities in respect of such comparative information: corresponding figures

and comparative financial statements The approach to be adopted is often specified

by law or regulation but may also be specified in the terms of engagement

The essential audit reporting differences between the approaches are:

(a) For corresponding figures, the auditor’s opinion on the financial statements

refers to the current period only; whereas

(b) For comparative financial statements, the auditor’s opinion refers to each period

for which financial statements are presented

ISA 710 addresses separately the auditor’s reporting requirements for each

approach

ISA 710 is effective for audits of financial statements for periods beginning on or

after December 15, 2009

Content of the Practice Note

P1 The Practice Note provides additional guidance for public sector auditors

related to:

1 All Practice Notes are considered together with General Considerations in the Financial Audit

Guidelines

2 ISA 510 (Redrafted), “Initial Audit Engagements – Opening Balances.”

This is trial version

www.adultpdf.com

4

a Scope of this ISA

b Audit Reporting

Applicability of the ISA in Public Sector Auditing

P2 ISA 710 (Redrafted) is applicable to auditors of public sector entities in their

role as auditors of the financial statements

Additional Guidance on Public Sector Issues

Scope of this ISA

P3 As noted in paragraph 2 of ISA 710 (Redrafted) the approach to be adopted

in regard to reporting responsibilities in respect of comparative information is

often specified by law or regulation Public sector auditors therefore need to

consider the audit mandate in addition to any terms of the engagement

Audit Reporting

P4 Normally the situations described in paragraphs 13 and 17 of ISA 710

(Redrafted) are less likely to occur in the public sector as the responsibility

to audit the financial statements may reside with the Supreme Audit

Institution (SAI) as defined in its mandate Situations where the concept of

predecessor auditor may be relevant are nationalization and privatization

When public sector auditors’ contract out the audit of the financial statements

and the responsibility of the audit remains within the SAI, the concept of

predecessor auditor will not be relevant

P5 If the prior period financial statements are amended as stated in paragraph 18

of ISA 710 (Redrafted) it may be common practice in some public sector

environments to include an Emphasis of Matter, if the matter is presented or

disclosed in the financial statements, or Other Matter Paragraph Such

practice would not contradict compliance with the ISAs

This is trial version

www.adultpdf.com

1

AGENDA ITEM 6-C (UPDATED)1 INTERNATIONAL STANDARD ON AUDITING 710

(REDRAFTED) COMPARATIVE INFORMATION—

CORRESPONDING FIGURES AND COMPARATIVE FINANCIAL STATEMENTS

(Effective for audits of financial statements for periods beginning on or after December 15, 2009)

CONTENTS

Paragraphs

Introduction

Scope of this ISA 1-3 Effective Date 4

Objectives 5

Definitions 6

Requirements

Audit Procedures 7-9 Audit Reporting 10-19

Application and Other Explanatory Material

Audit Procedures A1 Audit Reporting A2-A 118

Appendix 1 : Example Auditor’s Reports

Appendix 2: Reporting Decision Trees

1 [Agenda Item 6-C was updated during the September 15-19, 2008 IAASB meeting to reflect in marked text changes based on decisions taken at the meeting The updated agenda item is included here for information purposes only and is not the final pronouncement Interested parties are discouraged from distributing, translating or using the updated agenda item for any purpose They should await the release of the final pronouncement, which may contain minor modifications when compared to the updated agenda item The final pronouncement is that approved by the IAASB and published by IFAC after the Public Interest Oversight Board (PIOB) has confirmed that due process was followed in its development It will be available at http://www.ifac.org/IAASB/Resources.php

References in this ISA to other ISAs that have not yet been finalized reflect the working titles of those ISAs The references are indicated in brackets and will be updated when those ISAs are finalized.]

This is trial version www.adultpdf.com

INTERNATIONAL STANDARD ON AUDITING 710 (REDRAFTED)

2

International Standard on Auditing (ISA) 710 (Redrafted), ―Comparative Information— Corresponding Figures and Comparative Financial Statements‖ should be read in conjunction with ISA 200 (Revised and Redrafted), ―Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing.‖

This is trial version www.adultpdf.com